Constructed on an area of around 6000 square metres, the six-storeyed (two basements and four floors) building will accommodate around 600 cars. The commercial centre will include a food centre, shopping malls, restaurants and banquets. L&T has recently paid its first installment to MMRDA, as required by the tender, to assure its commitment. The company is, however, yet to take possession of the site.

The company will set up a special purpose vehicle (SPV) to invest in the project which will be based on 70:30 debt equity ratio. The initial equity will be funded through L&T's internal accruals. The SPV will be another arm of the company's Chennai-based construction division (ECC). L&Tis also open to the idea of roping in a partner at a later date.

While the instrument to raise the debt is still to be finalised, funds will be raised from banks and financial institutions. The project cost includes construction, land premium to be paid to MMRDA, contribution to the operation and maintenance corpus set up by MMRDA, interest during construction at 19 per cent, preliminary and pre-operation expenses.

Cars in the multi-storied building will have parking space of around 17,000 sq m while this will be 6,500 sq m for the commercial centre. As per the agreement after construction, L&T can operate a part of the commercial centre and a section of the car-park area. It will be up to L&T to sell this or lease it out. This includes over 4,400 sq m of commercial centre and a space to park over 325 cars, sources said.

The company is learnt to have initiated talks with various corporates for sale of space in the project. As this is a prime location, many corporates will be interested in owning aparking space in the building, analysts say.

According to them, the project can contribute good revenue to L&T but it should either sell the ownership or give the operation work on contract to an agency. As it is not in the line of L&T's business it should not get directly involved in operating the facility, they added.

The remaining part of the building, including 2000 sq m commercial space and the car parking space will be handed over to MMRDA. MMRDA had invited tenders for the project over a year ago and L&T turned out to be the only bidder. The authority however took a long time to evaluate the proposal. "As it was the first project of its kind, there was only one bidder. The job of examining the bid was difficult without any competitor," sources said. The development authority had hired an independent professional agency to evaluate the offer.